Honorable Bill Finch, Mayor

Members of the City CouncilCitizens of Bridgeport

State law requires that every general-purpose local government publish within six monthsof the close of each fiscal year a complete set of audited financial statements. This reportis published to fulfill that requirement for the fiscal year ended June 30, 2009.

Management assumes full responsibility for the completeness and reliability of theinformation contained in this report, based upon a comprehensive framework of internalcontrol that it has established for this purpose. Because the cost of internal control shouldnot exceed anticipated benefits, the objective is to provide reasonable, rather thanabsolute, assurance that the financial statements are free of any material misstatements.

Blum Shapiro has issued an unqualified (“clean”) opinion on the City of Bridgeport,Connecticut’s financial statements for the year ended June 30, 2009. The independentauditors’ report is located at the front of the financial section of this report.

auditors’ report and provides a narrative introduction, overview, and analysis of the basicfinancial statements. MD&A complement this letter of transmittal and should be read inconjunction with it.

Profile of the Government

The City of Bridgeport was incorporated in 1836 and annexed portions of theneighboring towns of Stratford and Fairfield in the late 1800’s. The City is locatedapproximately 60 miles east of New York City on the northern shore of Long IslandSound. With a 2000 U.S. Census population of 139,529 residents, Bridgeport is thelargest city in Fairfield County and the State of Connecticut, averaging almost 7,200people per square mile. Encompassing an area of 19.38 square miles (16.0 square milesof land and 3.38 square miles of water), Bridgeport’s 57,000 housing units are unequaledin the State of Connecticut.

iBridgeport operates under and is governed by the laws of the State of Connecticut and itsown charter, which was adopted by the State Legislature in 1907. A major revision to theCity’s charter was adopted in 1992 that streamlined governmental processes and providedfor greater administrative accountability. The Charter provides for a Mayor-Councilform of government. The Mayor is the chief executive officer of the City. The CityCouncil, which acts as the City’s legislative body, consists of twenty council memberselected to two-year terms. On November 3, 1998, voters approved a Charter changeproviding for four-year terms for the Mayor, City Clerk and Town Clerk. This termchange became effective in the November 1999 municipal election.

The City provides a full range of services to its citizens. These include: police and fireprotection; sewer and sanitation; education; library; airport; the highways, streets andinfrastructure maintenance; parks and recreation; cultural events and organizations;health and welfare; and general administrative services.

The annual budget serves as the foundation for the City of Bridgeport’s financialplanning and control.

Budget-to-actual comparisons are provided in this report for each individual

governmental fund for which an appropriated annual budget has been adopted. For thegeneral fund, this comparison is presented on Exhibit V as part of the basic financialstatements for the General Fund.

Factors Affecting Financial Condition

The information presented in the financial statements is perhaps best understood when itis considered from the broader perspective of the specific environment within which theCity operates.

Local Economy: The Bridgeport economy, like the State economy, continues to beimpacted by the effects of the national, regional, and statewide recession that started in2003. The City’s unemployment rate has risen for the fiscal year ended June 30, 2009 toa 10.7% annual average from a 7.6% annual average for the fiscal year ended June 30,2008. The State unemployment rate has shown an increase to 7.1% annual average forthe fiscal year ended June 30, 2009 from an annual average of 4.9% in 2008. The City’staxable base continues to show growth; the October 1, 2008 Grand List increased17.53%, which represents the fourteenth consecutive year that the grand list hasincreased. (The significant increased realized in 2008 is a result of the revaluationprocess per state statute that was initiated in 2007). The increase in the gross taxablegrand list has increased 164.1% since 2000.

Bridgeport had historically been a manufacturing/industrial City that was, for a time,primarily oriented for manufacturing products used in war efforts. The loss ofmanufacturing jobs on a national level in recent decades has impacted Bridgeport as well.The City’s economic development plans have focused on diversification of the localeconomic base, tailored to the City’s strengths of geographic location and skilledworkforce availability. Manufacturing job losses of the 1980’s and early 1990’s have

iistabilized and the City's strategy of identifying growth industries such as medical,financial services, construction, and film/media is proving successful. In order toenhance the infrastructure that serves the industrial base of the City and assemble the landand facilities necessary to provide for the expansion of existing corporations andaccommodate new businesses, redevelopment and new private investment within theCity’s industrial corridors continues.

Examples of recent significant public and private investments in Bridgeport are many.

Downtown DevelopmentDowntown Bridgeport is at the nexus of road, rail, transit, and water relatedtransportation infrastructure. Its location and existing assets provide the opportunity forBridgeport to become the transit-oriented development hub of Fairfield County. Withspiraling housing costs in western Fairfield County, particularly the other urban centersof Stamford and Norwalk, and the high incidence of traffic congestion on Interstate-95and the Merritt Parkway, Bridgeport is increasingly an option for residents andbusinesses seeking a cost effective and convenient location to live and work. As an ideallocation for permanent workforce housing for the region, the City is positioning itsdowntown to be an important asset in the sustained growth of the Fairfield Countyeconomy.

The downtown central business district has been the recipient of significant public sectorinvestment over the last few years, a result of the City’s focus on creating amenities andconveniences through intermodal transportation, entertainment and cultural facilities, anda growing middle income residential base.

The State of Connecticut’s Juvenile Court Complex is complete. The $40 millioncomplex allows the integration of the Family and Juvenile Courts into a centralizedfacility that is anticipated to stimulate new private investment in the area. The complex issited on the location of the City’s former Public Works garage, which was nevercompatible with other central business district activities and had previously discouragedprivate investment in Bridgeport’s downtown for more than 40 years.

The City recently completed the construction of a $17 million Bridgeport ITC Garage(Intermodal Transportation Center). This 900-car commuter parking facility helps linkthe various modes of transportation (Amtrak, Metro North, water ferries, airportlimousines, inter and intra-city buses and taxis) with downtown Bridgeport and theregion. It also serves as additional event parking for the Ballpark at Harbor Yard and theArena at Harbor Yard at night and on weekends. The garage was funded through Federaland State grants intended to reduce highway congestion. The City has secured theadditional funding to add two more parking decks and approximately 500 spaces to thegarage. The installation of the new decks has begun and will be completed in the springof 2010. The garage addition is the latest in a line of improvements to DowntownBridgeport’s transportation infrastructure including: the construction of an enclosed,elevated pedestrian walkway system connecting the ITC Garage to the Metro North railplatform (completed in May 2008); and a new state-of-the-art 17 bay bus terminaloperated by the Greater Bridgeport Transit Authority (opened in September 2007). The

In 2008, the State of Connecticut completed a $55 million expansion of Housatonic

Community College, doubling the size of the downtown facility. The college’s currentenrollment of 4,800 students is an all-time high. The consistently strong growth instudent enrollment at the college has provided added life to Bridgeport’s downtown.

Even with a slowdown of the national economy, significant private investment continuesto occur in downtown Bridgeport.

The Bridgeport Holiday Inn is currently undergoing a $10 million renovation, scheduledfor completion in early 2010. The renovation is proceeding in tandem with more than$40 million of other private investment occurring within a block’s distance of the hotel.

Urban Green Builders has completed the residential portion of the $30 million adaptivereuse project in the former Citytrust office building. The 118 units of rental housing havereached full occupancy largely with tenants that make a daily commute on Metro North,via the train station within two blocks of the project. In addition, Citibank has opened a3,000 square foot branch operation in the building, the bank’s first presence inDowntown Bridgeport in nearly 20 years. Urban Green has had a similar experience inits residential leasing for other downtown projects, including its residential conversion ofan office building at 144 Golden Hill Street and the $22 million historic restoration of theArcade Hotel. Both projects have achieved full residential occupancy.

The Lofts 881 adaptive reuse project was completed in the fall of 2008. The project, aconversion of an obsolete and vacant medical office building to 38 residentialcondominiums and retail space, was undertaken at a cost of approximately $7 million.Started in 2005, the Bijou Square Redevelopment Project consists of the renovation offour historic buildings along Fairfield Avenue in downtown Bridgeport. One of thebuildings houses the oldest movie theater in the nation. Approximately 20,000 squarefeet of restaurant, retail and office space has been renovated and occupied within thedevelopment. Two Boots Pizzeria, a New York based chain, opened their first restaurantoutside of New York City in Bijou Square in December of 2007. Antinozzi andAssociates, a leading regional architectural firm, moved from a suburban location intoBijou Square.

A new phase of Bijou Square, the construction of a 150,000 square foot mixed-usebuilding began in the fall of 2007, and is expected to be completed in 2010. The $25million project will create 84 residential units and nearly 10,000 square feet of groundfloor retail space, and constitutes the largest privately developed new construction projectin downtown Bridgeport since the late 1980s.

ivLike the Citytrust and Arcade Hotel projects undertaken by Urban Green, the BijouSquare project benefited from the use of the federal New Market Tax Credit (NMTC)program. To date, the City has seen three private real estate projects make use of theNMTC program. Bridgeport is one of only four cities in the State of Connecticut toutilize this financing tool.

The Forstone Group of Norwalk has recently acquired almost two (2) full city blocks ofdowntown real estate from People’s United Bank and is currently creating aredevelopment reuse plan for these holdings. The Forstone Group has also acquired theformer Mechanics & Farmers Bank Complex on State Street from the City and haspresented plans for the redevelopment of the property into a mixed-use retail andresidential complex.

Industrial Development and Energy Projects

The City has seen significant new industrial and commercial investment in recent years,including the expansion of several businesses and the construction of new businessfacilities. In 2005, Carr’s Ice Cream opened its new $1,400,000 cold storage warehouseon State Street in the West End on a portion of a previously remediated Brownfield site.Tolland, CT based Dari-Farms acquired Carr’s in 2007, and has negotiated theacquisition of additional property in order to expand its operations.

A-1 Truck Accessories completed construction of its new 17,000 square-foot, $1.6million facility on Howard Avenue in the West End in 2008. AKDO Intertrade, a majorimporter and distributor of marble, tile, granite and other high end stone products hasmoved into a new 115,000 square foot showroom, office and warehouse on the formerBryant Electric site in the City’s West End/State Street Corridor. Construction of the$8.5 million project was completed in 2006.

In 2005, Lecoq Cuisine Corporation relocated from Stamford, rehabilitating and

expanding a previously abandoned industrial building in the City’s East End. Thecompany is a wholesale, high-end bakery that distributes goods throughout thecontinental United States. The company currently occupies approximately 60,000 squarefeet, and in October 2009 presented plans to the State and the City for $10 million ofcapital investment in plant, machinery and equipment. United Rentals, the largestequipment rental company in the world, commenced with the construction on a 40,000square foot facility in the City in 2009. The facility, once completed, will be thecompany’s largest in New England. The facility will house equipment that is expected togenerate more than $300,000 annually in personal property taxes for the City. Theproject is being developed on what was formerly the long-dormant Bridgeport Brassproperty, a Brownfield site that had been idle since 1980.

All-Phase Construction, a fabricator and installer of steel and iron building componentsconstructed 30,000 square feet of modern manufacturing space in the Seaview IndustrialPark in 2007. The company plans to break ground on a 25,000 square foot warehouseaddition in 2010. The Seaview Industrial Park project is a notable example of the City’songoing efforts to remediate brownfields and pursue infill industrial development inappropriate neighborhood settings.

vThe Clearlight Group, of Wilton, CT, received zoning approval in July 2008 to constructClearlight Digital Studios on Seaview Avenue in the City’s East End neighborhood. The$7.5 million, 67,000 square foot facility is intended to be the most advanced soundstagefacility in the Northeast, designed to serve the needs of the Connecticut film industry.The project is expected to begin construction in early 2010.

The Singer Electric Substation and Middletown to Norwalk 345KV Power Lineprojects, undertaken by United Illuminating and Connecticut Light and Power, representfully taxable investments of well in excess of $100 million in the City. Both of theprojects were completed and activated in December 2008 and will help the City andFairfield County attain the energy infrastructure to support economic stability andgrowth.

North East Builders Supply and Home Centers continued the environmental clean-up ofa five acre former metal junkyard at 1558 Barnum Avenue in the East End. $2.3 millionof US Environmental Protection Agency funding is being utilized to subsidize theremediation. Approximately 30,000 square feet of industrial warehouse space iscurrently under construction on the site and it is expected that approximately 90,000square feet of commercial/industrial space will ultimately be constructed.

WestRock Development is currently renovating the former American Fabrics Complex

on Connecticut Avenue in the East End. WestRock has named the project BridgeportCommerce Park. This obsolete and underutilized 1930s manufacturing complex wasacquired by the City via property tax foreclosure in 2006. WestRock purchased theproperty from the City in 2008, and is currently investing approximately $3 million intorenovations, aimed at improving energy efficiency, site circulation and security. Thecomplex currently houses more than 20 business tenants, ranging from militarycontractors to manufacturers to artisans.

Since 2007, the State of Connecticut has certified 26 of the City’s companies for theState-sponsored Urban Jobs property tax incentive program. The participating companieshave been responsible for the creation or retention of approximately 600 jobs in the City.

Medical Sector and Senior Living Projects

As the center for hospital care in Eastern Fairfield County, the City’s health care industrycontinues to grow. Bridgeport Hospital, an employer of over 2,600 people, has recentlycompleted various upgrades to its 800,000 square foot complex.

St. Vincent’s Medical Center, which employs more than 2,000, completed constructionin 2009 on a $140 million expansion project which added parking capacity, 90,000square feet to its emergency facilities and established a home for the hospital’s newcancer center.

The Watermark at 3030 Park, a senior living and assisted living center, completed a $40million expansion and rehabilitation project in 2009. The property had been tax exemptand subject to a minimal payment in lieu of taxes under prior ownership, but will payapproximately $860,000 annually to the City under a payment in lieu of taxes agreement.

viWaterfront Development/Steel PointeDerecktor Shipyards is a ship building and repair facility that occupies 23 acres ofwaterfront property on Bridgeport Harbor leased from the Bridgeport Port Authority. Inits first year of Bridgeport operations in 2001, Derecktor created 130 full-time jobs. Full-time employment now exceeds 220, with an additional 130 contract employees workingon projects at the Bridgeport facility. In 2003, Derecktor installed a $2.5 million, 600-tontravel lift that is the second largest operating apparatus of its kind in the world, andlargest in the western hemisphere. The travel lift has been a major contributor to theannual growth of the company’s repair business. Derecktor has established itself as anindustry leader in the construction of water taxis, high-speed ferries and other specialtyand luxury crafts. The company has obtained local land use approvals for theconstruction of three new buildings on its property, part of a $30 million capitalexpansion it plans to pursue that will allow it to capture a growing customer market andfulfill current contracts. In October 2009, the State of Connecticut committed $1 millionto the project, allowing the company to access approximately $3 million in federalstimulus funding for the project from the US Department of Transportation MaritimeAdministration.

In September 2009, the Simon Konover Company (“Konover”) announced plans forSeaview Plaza, a 152,000 square foot retail development in Bridgeport’s East Sideneighborhood. The plans include an anchor grocery store, pharmacy, a waterfrontrestaurant and public access to the waterfront. The City’s Port Authority which owns theunderlying land and Konover are currently negotiating a Development Agreement.Construction is anticipated to begin in 2010.

On November 10, 2009 the City entered into an Amended and Restated Development andAcquisition Agreement with Bridgeport Landing Development (“BLD”) for the SteelPointe project. The newly approved version of the agreement contained necessarychanges to the 2007 Development and Acquisition Agreement, which had beennegotiated in a different economic climate.

Upon execution of the new agreement, BLD paid the City $500,000 in the form of anonrefundable deposit. The development program calls for an ultimate build-out ofapproximately 2.8 million square feet of commercial and residential improvement in fourseparate phases only after demonstrating to the City that tenants and financing have beensecured. The agreement requires BLD to acquire a portion of the waterfront real estateand to commence construction there of certain public improvements, infrastructure, and arestaurant in 2011. On an eleven (11) acre parcel of real estate adjacent to Interstate 95,BLD is required to commence construction on 135,000 square feet of retail space prior to2012. The agreement provides that other phases of the project will proceed following theconstruction of the first two phases. During 2010, the City will construct a 2,000 squarefoot refrigerated warehouse on the property for Bloom Shellfish, an oyster farmingcompany. The warehouse will be subject to full property taxation. One hundred percentof the funding for the warehouse’s construction has been secured from the State ofConnecticut.

viiThe new agreement commits BLD to advance all of the funds necessary to fund thepublic improvements for the initial retail phase and to advance a minimum of $3 millionin funding for public infrastructure improvements related to the waterfront portion of theproject. The City secured this commitment from BLD in light of the anticipateddifficulty in issuing property tax incremental financing bonds to fund publicimprovements in the current economic climate. Pursuant to Public Act 05-289 of the2005 state legislature session, the City is authorized to create the Steel PointeInfrastructure Improvement District (the “District”), a special taxing district with theability to issue as much as $190 million of bonds secured by property tax incrementalfinancing and additional assessments on property within the District. District bondproceeds would be utilized to create and construct the public improvements on the SteelPointe site. Upon the issuance of District bonds, BLD would be reimbursed for itseligible expenditures previously advanced for the waterfront public improvements andrelated infrastructure. If the district bonds are not issued, the City is obligated toreimburse BLD for those advances. District bonds are not expected to be guaranteed bythe City.

In addition to the availability of the district bonds, the Connecticut state legislature hasauthorized up to $40 million of state sales tax incremental financing for the project,subject to approval by the Connecticut Development Authority, which may potentiallysubsidize construction of certain retail developments. The sales tax incrementalfinancing also may effectively reduce the project’s dependency on local property taxincremental financing for the construction of necessary public infrastructure.

For more information on current development activity in the city of Bridgeport, pleasesee the City’s web site at: www.ci.bridgeport.ct.us, scroll down on the left side to “HotTopics” and click on “Bridgeport Development”.

Cash Management Policies and Practices: It is the policy of the City of Bridgeport toinvest funds in a manner which will provide the highest investment return with themaximum security while meeting the daily cash flow demands of the City andconforming to all statutes governing the investment of funds. Idle cash was invested on ashort-term basis, during the year, in temporary, legally permitted investments. Moneymarket investments managed by TD Banknorth, US Bank and People’s United Bankcomprised the major share of the City’s short-term investments as well as money investedin the Short-Term Investment Fund (STIF) operated by the Office of the State Treasurer.

Risk Management: The City is insured for building and contents in the amount ofapproximately $383,123,000 with a $250,000 deductible. The Sikorsky MemorialAirport is insured for a $100,000,000 general liability policy with a hangers-keeperliability deductible of $1,000 on any one occurrence. The City has theft and dishonestybonds for $250,000 each for the Police Department and City Hall employees. It also hasa Tax Collector’s bond in the amount of $2,205,000.

The City is self-insured for general liability, professional liability, worker’s compensationand heart and hypertension claims. The City has contracted with an outside company tooversee its workers' compensation and heart and hypertension claims.

viiiThe City provides comprehensive life, hospital, and major health benefits for itsemployees pursuant to various union contracts. The City is self insured for itsemployees’ health and medical benefits and has contracted with HealthNet to act as athird party administrator of the plan.

The benefits officer and safety officer are pro-active in implementing programs toimprove employee’s health and prevent injuries. Blood pressure screening, flu shots andsafety committees for all major departments of the City are examples of some of theseprograms.

Pension and Other Post-Employment Benefits: All full-time employees of the City,except for the Board of Education personnel, police, firefighters and janitors andengineers, participate in the Connecticut Municipal Employees’ Retirement Fund B(CMERF). This is a cost-sharing multiple employer public employee retirement system.The City’s payroll for employees covered under this plan for the year ended June 30,2009 was $74.9 million, which represents 28.8 percent of the total City payroll of $260.5million.

In addition to CMERF, the Board of Education teachers and certified administrators

participate in a contributory defined benefit plan that is a State-financed teachers’retirement system. For the year ended June 30, 2009, the City’s payroll for employeescovered under this plan was $114.4, which represents 43.9 percent of the total Citypayroll.

All other full-time employees belong to one of the following single employer definedbenefit plans:

i) Public Safety Plan A Investment and Pension Trust

Pension plans ii and iii above are funded on an actuarial basis. Pension plan iv is fundedon a “pay as you go” basis, that is, the City’s contribution to the plan is the amountnecessary to pay annual benefits. Plan i is a closed plan with no new enrollments havingbeen allowed since January 1, 1984. During the year ended June 30, 2001, the Cityissued $350,000,000 of taxable pension obligation bonds. These assets are invested and,along with the revenues produced, will be used to fund future benefit payments tomembers of Plan i.

Awards and Acknowledgements

The Government Finance Officers Association of the United States and Canada (GFOA)awarded a Certificate of Achievement for Excellence in Financial Reporting to the Cityof Bridgeport, Connecticut for its comprehensive annual financial report (CAFR) for thefiscal year ended June 30, 2008. The Certificate of Achievement is a prestigious national

ixaward-recognizing conformance with the highest standards for preparation of state andlocal government financial reports.

In order to be awarded a Certificate of Achievement, a government unit must publish an

easy to read and well-organized comprehensive annual financial report, whose contentsconform to program standards. The CAFR must satisfy both generally acceptedaccounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The City ofBridgeport has received a Certificate of Achievement in each of the last ten years. Webelieve our current report continues to conform to the Certificate of Achievementprogram requirements, and we are submitting it to GFOA.

The preparation of the Comprehensive Annual Financial Report was made possible bythe efficient and dedicated services of the entire staff of the Finance Department,particularly the Comptroller's Office, Internal Audit Department and In-Plant Print Shop.We want to express our appreciation for the cooperation, assistance and support of otherCity departments.

We would like to acknowledge the thorough and professional manner in which ourindependent auditors, Blum Shapiro, conducted the audit.

The cover photograph is a shot of the City’s publically owned D. Fairchild Wheeler GolfCourse. Fairchild Wheeler offers two challenging 18 hole golf courses. The Red GolfCourse features 6,568 yards of golf from the Championship Tees for a par 72. Thecourse rating is 71.0 and the slope is 124. The Red Golf Course demands accurate teeshots which will leave most golfers with mid to short irons for their approach shots. TheBlack Golf Course features 6,559 yards of golf from the Championship Tees for a par 71.The course rating is 71.5 and the slope is 123. The Black course has beautiful windinghills, great scenic views and delivers a challenge with newly renovated fairway andgreenside bunkers

The cover photograph was taken by Anthony Palumbo, Director of the In-Plant PrintShop.

In closing, without the leadership and support of the Mayor and City Council, preparationof this report would not have been possible.

School Superintendent John J. Ramos, Sr., E.D.D. Board of Education

Independent Auditors’ Report

To the Honorable Mayor and

Members of the City CouncilCity of Bridgeport, Connecticut

We have audited the accompanying financial statements of the governmental activities, thebusiness-type activities, each major fund and the aggregate remaining fund information of theCity of Bridgeport, Connecticut, as of and for the year ended June 30, 2009, which collectivelycomprise the City’s basic financial statements as listed in the table of contents. These financialstatements are the responsibility of the City of Bridgeport, Connecticut’s management. Ourresponsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes consideration ofinternal control over financial reporting as a basis for designing audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the City’s internal control over financial reporting. Accordingly, we express nosuch opinion. An audit also includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, the business-type activities, eachmajor fund and the aggregate remaining fund information of the City of Bridgeport, Connecticut,as of June 30, 2009, and the respective changes in financial position and cash flows, whereapplicable, thereof, and the respective budgetary comparison for the General Fund for the yearthen ended in conformity with accounting principles generally accepted in the United States ofAmerica.

Blum, Shapiro & Company, P.C.

WEST HARTFORD • SHELTON Westport • Waterbury • New York An Independent Member of Baker Tilly InternationalIn accordance with Government Auditing Standards, we have also issued our report datedDecember 28, 2009 on our consideration of the City of Bridgeport, Connecticut’s internal controlover financial reporting and on our tests of its compliance with certain provisions of laws,regulations, contracts, grant agreements and other matters. The purpose of that report is todescribe the scope of our testing of internal control over financial reporting and compliance andthe results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be considered in assessing the results of ouraudit.

The management discussion and analysis on pages 3 through 15 is not a required part of thebasic financial statements, but is supplementary information required by accounting principlesgenerally accepted in the United States of America. We have applied certain limited procedures,which consisted principally of inquiries of management regarding the methods of measurementand presentation of the required supplementary information. However, we did not audit theinformation and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the City’s basic financial statements. The introductory section, budgetarydetail, combining and individual nonmajor fund statements and schedules, and statistical sectionare presented for purposes of additional analysis and are not a required part of the basic financialstatements. The budgetary detail, combining and individual nonmajor fund statements andschedules have been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, are fairly stated in all material respects in relation to thebasic financial statements taken as a whole. The introductory section and statistical section havenot been subjected to the auditing procedures applied in the audit of the basic financialstatements and, accordingly, we express no opinion on them.

December 28, 2009

2 City of Bridgeport, Connecticut Management’s Discussion and Analysis June 30, 2009As management of the City of Bridgeport, Connecticut (the City) we offer readers of thefinancial statements this narrative overview and analysis of the financial activities of the City forthe fiscal year ended June 30, 2009. We encourage readers to consider the information presentedhere along with additional information we have furnished in our letter of transmittal, as well asthe City’s basic financial statements that follow this section.

Financial Highlights♦ On a government-wide basis, the assets of the City exceeded its liabilities resulting in total net assets at the close of the fiscal year of $225,229,398. Total net assets for Governmental Activities at fiscal year-end were $144,921,915 and total net assets for Business-Type Activities were $80,307,483. The unrestricted net deficit at June 30, 2009 was $(298,352,692).♦ On a government-wide basis, during the year, the City’s net assets increased by $28,996,365 from $196,233,033 to $225,229,398, due primarily to approximately $26.9 million in capital grants received for school construction projects. Net assets increased by $24,354,903 for Governmental Activities and by $4,641,462 for Business-Type Activities. Government-wide expenses for governmental activities were $601.6 million, while revenues were $625.9 million.♦ At the close of the year, the City’s governmental funds reported, on a current financial resource basis, combined ending fund balances of $43.8 million, a decrease of $53.9 million from the prior fiscal year. Of the total fund balance as of June 30, 2009, $38.7 million represents the combined unreserved fund balance in the general fund, special revenue funds, capital projects fund and permanent trust fund. Of this balance, only $10.7 million, $47 thousand and $29.8 million which represent the positive unreserved fund balance in the general fund, permanent trust and capital funds are available for spending at the City’s discretion.♦ At the end of the current fiscal year, the total fund balance for the General Fund alone was $10.7 million, an increase of $147,651 from the prior fiscal year. As of June 30, 2009, the General Fund’s unreserved fund balance was $10.7 million. Unreserved general fund fund balance at year-end represents 4.08% of total general fund expenditures ($263 million).♦ The City’s total debt decreased by $32.9 million during the current fiscal year.

Overview of the Financial Statements

This discussion and analysis are intended to serve as an introduction to the City’s basic financialstatements. The basic financial statements comprise three components: 1) government-widefinancial statements; 2) fund financial statements; and 3) notes to the financial statements. Thisreport also contains other supplementary information and a statistical section as well as the basicfinancial statements. The statistical section provides comparisons of selected informationbeginning with fiscal year 2000.

3 Government-Wide Financial Statements

The government-wide financial statements are designed to provide readers with a broadoverview of the City’s finances, in a manner similar to a private-sector business. All of theresources the City has at its disposal are shown, including major assets such as buildings andinfrastructure. A thorough accounting of the cost of government is rendered because thestatements present all costs, not just how much was collected and disbursed. They provide bothlong-term and short-term information about the City’s overall financial status.

The statement of net assets presents information on all of the City’s assets and liabilities, withthe difference reported as net assets. Over time, increases or decreases in net assets may serve asan indicator of whether the financial position of the City is improving or deteriorating. It speaksto the question of whether or not, the City, as a whole is better or worse off as a result of thisyear’s activities. Other non-financial factors will need to be considered, however, such aschanges in the City’s property tax base and the condition of the City’s infrastructure, to assessthe overall health of the City.

The statement of activities presents information showing how the City’s net assets changedduring the most recent fiscal year. All of the current year’s revenues and expenses are taken intoaccount regardless of when cash is received or paid. Thus, revenues and expenses are reported inthis statement for some items that will only result in cash flow in some future fiscal period,uncollected taxes and earned but unused vacation leave are examples.

Both of the government-wide financial statements distinguish functions of the City that aresupported by taxes and intergovernmental revenues (governmental activities) from otherfunctions that are intended to recover all or a significant portion of their costs through user feesand charges (business-type activities).

♦ Governmental activities of the City encompass most of the City’s basic services and include governmental and community services, administration, public safety, health and welfare, operations and education. Property taxes, charges for services and state and federal grants finance most of these activities.♦ Business-type activities of the City consist of the Water Pollution Control Authority. It is reported here, as the City charges a user fee to customers to help cover all or most of the cost of operations.

The government-wide financial statements (Statement of Net Assets and Statement of Activities)can be found on Exhibits I and II of this report.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control and accountability overresources that have been segregated for specific activities or objectives. The City, like otherstate and local governments, uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements. The City has three types of funds:

Governmental funds. Governmental funds are used to account for essentially the samefunctions reported as governmental activities in the government-wide financial statements.However, unlike the government-wide financial statements, governmental fund financial 4statements focus on near-term inflows and outflows of spendable resources, as well as onbalances of spendable resources available at the end of the fiscal year. Such information may beuseful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financialstatements it is useful to compare the information presented for governmental funds with similarinformation presented for governmental activities in the government-wide financial statements.By doing so, readers may better understand the long-term impact of the government’s near-termfinancing decisions. Both the governmental fund balance sheet and the governmental fundstatement of revenues, expenditures, and changes in fund balances provide a reconciliation tofacilitate this comparison between governmental funds and governmental activities.

The City maintains 28 individual governmental funds. Information is presented separately in thegovernmental fund balance sheet and in the governmental fund statement of revenues,expenditures and changes in fund balances for the General Fund, the Board of Education Fund,and the Capital Bond Issue Fund, all of which are considered to be major funds. Data from theother governmental funds are combined into a single, aggregated presentation as NonmajorGovernmental Funds. Nonmajor governmental funds for the City include the Education GrantFund, the Health and Sanitation Fund, the Community Development Fund, the Other ProgramsFund, the Social Services Fund, the Community Development Block Grant Fund, the HousingOpportunities Aids Fund, the Home Program Fund, the Section 108 Loan Guarantee Fund, theDevelopment Administration State Grant Fund, the Library Fund, the Education Fund, the Parksand Recreation Fund, all of which are considered Special Revenue Funds. In addition, theEducation and Library Fund, the Health and Sanitation Fund, the Highway and Parking Fund, theGeneral Government Fund, the Parks and Recreation Fund, the Municipal Airport Fund, theCapital Reduction Fund, the Bond Issue Fund, the School Bond Issue Fund, and the 1997 BondIssue Fund are all considered Capital Projects Funds. Permanent Trust Funds consist of theLibrary Fund and the Education Fund. Individual fund data for each of these nonmajorgovernmental funds is provided in the combining balance sheets on Exhibit B-1 and in thecombining statement of revenues, expenditures and changes in fund balance on Exhibit B-2.

The City adopts an annual appropriated budget for its general fund. A budgetary comparisonstatement has been provided for the general fund to demonstrate compliance with the authorizedbudget. The statement of revenues, expenditures and changes in fund balance on a budgetarybasis can be found on Exhibit V.

The basic governmental fund financial statements (balance sheet and statement of revenues,expenditures and changes in fund balance) can be found on Exhibits III and IV of this report.

Proprietary funds. The City of Bridgeport maintains two different types of proprietary funds.Enterprise funds are used to report the same functions presented as business-type activities ingovernment-wide financial statements. The City of Bridgeport uses an enterprise fund toaccount for its Water Pollution Control Authority. Internal Service funds are an accountingdevice used to accumulate and allocate costs internally among the City of Bridgeport’s variousfunctions. The City of Bridgeport uses an internal service fund to account for its healthinsurance system. Because this service predominantly benefits governmental functions ratherthan business-type functions, it has been included within governmental activities in thegovernment-wide financial statements.

5Proprietary funds provide the same type of information as the government-wide financialstatements, only in more detail. The proprietary fund financial statements can be found onExhibits VI - VIII of this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit ofparties outside the government. Fiduciary funds are not reflected in the government-widefinancial statement because the resources of those funds are not available to provide services tothe City’s constituency. The City has four pension trust funds. The accounting used forfiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financialstatements can be found on Exhibits IX and X of this report.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the dataprovided in the government-wide and fund financial statements. The notes to the financialstatements can be found on pages 28-66 of this report.

The notes to this report also contain certain information concerning the City’s progress infunding its obligation to provide pension benefits to its employees.

Government-Wide Financial Analysis

As noted earlier, net assets may serve over time as a useful indicator of a government’s financialposition and an important determinant of its ability to finance services in the future. On agovernment-wide basis, the City’s assets exceeded its liabilities by $225,229,398 at June 30,2009. This is an increase of $28,996,365 from last year’s net assets of $196,233,033.

6At the end of the current fiscal year, the City is able to report a positive balance in both itsgovernmental and proprietary activities.

The portion of the City’s net assets of $518,987,103 reflects its investment in capital assets (e.g.,land, buildings, infrastructure, machinery and equipment), net of any outstanding debt related tothese assets. The City uses these capital assets to provide services to citizens; consequently,these assets are not available for future spending. Although the City’s investment in its capitalassets is reported net of related debt, it should be noted that the resources needed to repay thisdebt must be provided from other sources, since the capital assets themselves cannot be used toliquidate these liabilities.

♦ The portion of the City’s net assets that are restricted, $4,594,987, represents resources that are subject to external restrictions on how they may be used. Unrestricted net deficits of $(298,352,692) may not be used to meet the government’s ongoing obligations to citizens and creditors, due to the negative balance. The primary reason for the large negative balance is due to the issuance of the August 2000 General Obligation Taxable Pension Bonds, which were issued to properly fund pension plans, which were previously funded on a “pay-as-you- go” basis, which has a net outstanding balance of $311,800,000. On a government-wide basis, during the year, the City’s net assets increased by $28,996,365 from $196,233,033 to $225,229,398. Net assets increased by $24,354,903 for Governmental Activities and net assets increased by $4,641,462 for Business-Type Activities. Government-wide expenses were $626.5 million, while revenues were $655.5 million. The increase in net assets can primarily be explained by the increase in grant revenue associated with capital projects.

Change in net assets 24,355 75,665 4,641 3,239 28,996 78,904

Net Assets, beginning 120,567 44,902 75,666 72,427 196,233 117,329

89Bridgeport’s net assets increased by $28,996,365 during the fiscal year, with the net assets ofGovernmental Activities increasing by $24,354,903 million, and net assets of Business-TypeActivities increasing by $4,641,462. The increase in net assets represents the degree to whichincreases in revenues have outpaced ongoing expenditures.

Governmental Activities

Program revenues represented 56% of total revenues, followed by property taxes at 39%, andother unrestricted grants and investment earnings at 5%.

10Major revenue factors included:♦ Property tax revenues recorded for fiscal year 2009 reflect the first year of the State mandated revaluation and increased collection efforts. This represents an increase of $21,714,968 from the prior fiscal year ended June 30, 2008.♦ Capital grants and contributions decreased in the General Fund from $87,193,304 in the prior fiscal year to $35,296,564 for the fiscal year ended June 30, 2009.

Major expenditure factors include:

♦ Employee benefit costs rose between 5% and 10% due to rising health insurance costs.♦ During the 2008-2009 budget process, discretionary expenses held stable.♦ Police Overtime remained stable due to new deployment and community policing initiatives.♦ Governmental activities increased the City’s net assets by $78,903,553.

Business-Type Activities

Water Pollution Control Authority (WPCA) revenue for charges for services went from $27.5million in fiscal year 2008 to $28 million in fiscal year 2009.

Financial Analysis of the Fund Financial Statements

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements.

Governmental funds. The focus of the City’s governmental funds is to provide information onnear-term inflows, outflows, and balances of spendable resources. Such information is useful inassessing the City’s financing requirements. In particular, unreserved fund balance may serve asa useful measure of a City’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City’s governmental funds reported combined endingfund balances of $43.8 million, a decrease of $53.9 million from the prior year. Due to thedeficit nature of the total combined unreserved fund balance, only 27.73% of this total amount(which is the $10.7 million General Fund unreserved fund balance) constitutes unreserved fundbalance that is available for spending at the City’s discretion. The remainder of fund balance isreserved to indicate that it is not available for new spending because it has already beencommitted: 1) $4,406,906 million to liquidate contracts and purchase orders of the prior period;2) $661,212 for endowments.

11The General Fund is the chief operating fund of the City. At the end of the current fiscal year,unreserved (and total) fund balance of the General Fund was $10.7 million. As a measure of theGeneral Fund’s liquidity, it may be useful to compare both unreserved fund balance and totalfund balance to total fund expenditures. Unreserved (and total) fund balance represents 4.08% oftotal General Fund expenditures. For fiscal year ended June 30, 2009 there were no amountsreserved for General Fund encumbrances.

The Capital Bond Issue Fund has a total fund balance of $26.9 million down from $76.7 millionin the prior year. The change in fund balance can be explained by the timing of resources intoand out of this fund for ongoing capital projects.

The Other Governmental Funds have a total fund balance of $6.1 million, down from $7.59million in the prior year.

Proprietary funds. The City’s proprietary fund provides the same type of information found inthe government-wide financial statements, but in more detail.

Net assets of the proprietary fund consisting of the Water Pollution Control Authority were $80.3million, as compared to $75.7 million in the prior year.

The unrestricted net assets of the Water Pollution Control Authority were $4.4 million. TheWater Pollution Control Authority experienced operating revenues of $26.8 million from userfees. There was a total net gain for the WPCA of $3.2 million before capital contributions of $1.4million. The change in net assets for the fiscal year ended June 30, 2009 was $4.6 million.

Education fund. Intergovernmental revenues accounted for $22.7 million while other financingsources accounted for $222.8 million, of which was transferred into the fund from the GeneralFund. The net change in the fund balance accounted for $(2,789,017). The fund balance forfiscal year ended June 30, 2009 was $0.00.

General Fund Budgetary Highlights

During the year, actual revenues and other financing sources on a budgetary basis were$480,237,261 million. This was approximately $11.96 million under the modified budgetaryestimate. Actual tax revenues were $7.7 million under budget. Overall, fees permits andlicenses was $1.6 million under budgetary estimates primarily due to less than anticipatedrevenues granted to the city through user fees. In addition, certifications under the Town Clerkwere $706 thousand less than the $1.25 million budgeted due to the reduction of fees associatedwith property transfers. Some of these underperforming revenues were offset byintergovernmental revenues that came in over the budgeted amount. The Educational CostSharing grant came in ahead of schedule by $588 thousand, School construction refunds were$413 thousand over while the Federal Breakfast program revenues tracked ahead of schedule by$559 thousand.

Actual expenditures on a budgetary basis and other financing uses totaled $480,237,261 million,which were less than actual revenues and other financing sources on a budgetary basis by$147,651.

12Capital Asset and Debt Administration

Capital Assets. The City’s investment in capital assets for its governmental and business-typeactivities, as of June 30, 2009, amounted to $911,322 million, net of accumulated depreciation.This investment in capital assets includes land, building and system improvements, machineryand equipment, park facilities, roads, sewers and bridges. The total increase in the City’sinvestment in capital assets for the current fiscal year was $74.2 million. CITY OF BRIDGEPORT, CONNECTICUT CAPITAL ASSETS (Net of Depreciation) (In Thousands)

Total $ 786,937 $ 710,634 $ 124,385 $ 126,522 $ 911,322 $ 837,156

13Major capital asset events during the current fiscal year included the following:

♦ Construction, improvements and renovations to school buildings and facilities.

♦ Continued rehabilitation of playgrounds and athletic fields.♦ Infrastructure improvements including roads, bridges, and sanitary and sewer projects.♦ Acquisition of parcels for ongoing city development projects.

Additional information on the City’s capital assets can be found in Note 7 on pages 43-44 of thisreport. CITY OF BRIDGEPORT, CONNECTICUT OUTSTANDING DEBT

Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstandingof $654,200,000. 100% of this debt is backed by the full faith and credit of the City government.The Water Pollution Control Authority is expected to reimburse the City $450,000 through userfee charges, the bonds for WPCA capital projects were issued through the City in June 2007.

14The City’s total debt decreased by $32.9 million during fiscal 2008.

Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Rating Group (Standard &Poor’s) and FitchRatings, Inc (Fitch) have each assigned their municipal bond ratings of “Aaa”,“AAA”, and “AAA” respectively to the City with the understanding that there is an insurancepolicy insuring the payment when due of the principal and interest of the bonds. Moody’s,Standard & Poor’s and Fitch have assigned the underlying ratings for the City’s uninsuredgeneral obligation debt as “Baa1”, “A-” and “BBB+”, respectively.

The overall statutory debt limit for the City is equal to seven times annual receipts from taxationor $1.74 billion. As of June 30, 2009, the City recorded long-term debt of $658.7 million relatedto Governmental Activities and $49.9 million related to Business-Type Activities, well below itsstatutory debt limit.

Additional information on the City of Bridgeport’s long-term debt can be found in Note 9 onpages 45-47 of this report.

Economic Factors and Next Year’s Budgets and Rates

The City, surrounding towns, and the State have not been immune from the effects of thenational economic downturn but all are starting to show a small decline in their unemploymentrate. As of June 30, 2009, the unemployment rate for the Bridgeport Labor Market Area was10.7%, up from 7.6% in the prior year. Connecticut’s overall unemployment rate increased to7.1% from 4.9%, compared with the same period for the previous year.

GASB Statements 43 and 45 Requirements

The City is in compliance with the requirements of GASB Statements 43 and 45, which requiremunicipalities and other governmental entities to undertake an actuarial evaluation of their otherpost-employment benefit (OPEB) plans and include information concerning the valuation ofsuch plans in their financial statements. Currently, the City funds its OPEB costs on a pay-as-you-go basis. For fiscal year ended June 30, 2009, $30,099,100 was budgeted for OPEB costs.The City has retained an outside actuarial consulting firm to prepare the valuation of its OPEBplans. Based on this assessment, the City’s estimated Annual Required Contribution is$50,744,800 with a net OPEB obligation of $38,705,900.

Requests for Information

The financial report is designed to provide a general overview of the City’s finances for all thosewith an interest in government’s finances. Questions concerning any of the information providedin this report or requests for additional financial information should be addressed to the Directorof Finance at 45 Lyon Terrace, Bridgeport, CT 06604.

Governmental funds report capital outlays as expenditures. In the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense:

Capital outlay 94,185,591

Depreciation expense (17,881,708)

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds, and revenues recognized in the funds are not reported in the statement of activities:

School building grant receipts (1,482,362)

The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets. Also,, governmental g funds report p the effect of issuance costs,, ppremiums,, discounts and similar items when debt is first issued, whereas these amounts are amortized and deferred in the statement of activities. The details of these differences in the treatment of long-term debt and related items are as follows:

Bond and note principal payments 31,177,000

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds:

Internal service funds are used by management to charge costs to individual funds. The net revenue of certain activities of internal services funds is reported with governmental activities. (60,728,441)

Net investment loss (69,690,558)

Total reductions (48,958,728)

Net decrease (87,604,552)

Net assets held in trust for pension benefits, beginning of year 386,702,317

Net Assets Held in Trust for Pension Benefits, End of Year $ 299,097,765

The accompanying notes are an integral part of the financial statements

27 CITY OF BRIDGEPORT, CONNECTICUT

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The City of Bridgeport, Connecticut (the City) was founded in 1639, incorporated as a town in 1821, and as a city in 1836. The City operates under a Mayor - City Council form of government.

Accounting principles generally accepted in the United States of America require that the reporting entity include 1) the primary government, 2) organizations for which the primary government is financially accountable and 3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The criteria provided in the Codification, Section 2100, have been considered and, as a result, there are no agencies or entities that should be, but are not, combined with the basic financial statements of the City.

B. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported, instead, as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied for. Intergovernmental grants and entitlements and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

28Governmental fund financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenues are recognized as soonas they are both measurable and available. Revenues are considered to be available when they arecollectible within the current period, or soon enough thereafter, to pay liabilities of the currentperiod. For this purpose, the City considers revenues to be available if they are collected within 60days of the end of the current fiscal period. Expenditures are generally recorded when a liability isincurred, except for debt service expenditures, and expenditures related to compensated absencesand claims and judgments which are recorded only when payment is due (matured).

Property taxes when levied for, intergovernmental revenues when eligibility requirements are met,licenses, and interest associated with the current fiscal period are all considered to be susceptible toaccrual (measurable) and so have been recognized as revenues of the current fiscal period, ifavailable. All other revenue items are considered to be measurable only when cash is received bythe City.

The City reports the following major governmental funds.

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The Board of Education Fund accounts for operations of the Board of Education, except those required to be accounted for in another fund.

The Capital Bond Issue Fund accounts for various construction projects that are funded out of proceeds from the capital bond issues and other sources of revenue.

The City reports the following major proprietary fund:

The Water Pollution Control Authority of the City of Bridgeport (the WPCA) accounts for the activities of the two sewage treatment plants, sewage pumping stations and collection systems of the City.

Additionally, the City reports the following fund types:

The pension trust funds account for the activities of the City’s four defined benefit pension plans, which accumulate resources for pension benefit payments to qualified employees.

The agency fund accounts for monies held as a custodian for outside groups.

The internal service fund accounts for the revenues and related expenses for the health, workers compensation and heart and hypertension self-insurance plan for the employees and retirees of the City.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989generally are followed in both the government-wide and proprietary fund financial statements to theextent that those standards do not conflict with or contradict guidance of the GovernmentalAccounting Standards Board. Governments also have the option of following subsequent private-sector guidance for enterprise funds, subject to this same limitation. The City has elected not tofollow subsequent private-sector guidance.

As a general rule, the effect of interfund activity has been eliminated from the government-widefinancial statements. Exceptions to this general rule are charges between the WPCA and various

29other functions of the government. Elimination of these charges would distort the direct costs andprogram revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods,services, or privileges provided, 2) operating grants and contributions, and 3) capital grants andcontributions, including special assessments. Internally dedicated resources are reported as generalrevenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operatingrevenues and expenses generally result from providing services in connection with a proprietaryfund’s principal ongoing operations. The principal operating revenues of the WPCA are charges tocustomers for user fees. Operating expenses include the cost of operations and maintenance, anddepreciation on capital assets. All revenues and expenses not meeting this definition are reported asnonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to userestricted resources first, then unrestricted resources as they are needed.

Accounting estimates

The preparation of the basic financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues, expenses andexpenditures during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

The City considers all highly liquid short-term investment funds, including those that are classifiedas restricted assets, and all certificates of deposit and treasury bills with an original maturity ofthree months or less, to be cash equivalents.

Investments

Investments are primarily stated at fair value using quoted market prices. The majority of theCity’s investments are in the General Fund and Pension Trust Funds. The Connecticut StateTreasurer’s Short-Term Investment Fund is an investment pool managed by the State ofConnecticut Office of the State Treasurer. Investments must be made in instruments authorized byConnecticut General Statutes 3-27c through 3-27e. Investment guidelines are adopted by the StateTreasurer. The fair value of the position in the pool is the same as the value of the pool shares.

The balance of the pooled fixed income investments were invested in a pool similar to a 2a-7investment pool. The fair value of the position in the pool is the same as the value of the poolshares. These investments are stated at amortized cost.

The City also invests in hedge funds, commonly known as alternative investments. The City’sinvestment policy allows for such investments. All assets are carried at fair value based upon theunderlying assets of the funds. Losses are incurred only up to the assets invested.

30Property taxes

Property taxes are assessed as of October 1, are levied on the following July 1, and are due in twoinstallments - July 1 and the following January 1. Liens are filed on the last day of the fiscal year.

Capital assets

In the government-wide and proprietary fund financial statements, capital assets include property,plant, equipment and infrastructure assets. Capital assets are defined by the government as assetswith an initial, individual cost of more than $10,000 and an estimated useful life in excess of twoyears. Purchased and constructed assets are recorded at cost. Donated capital assets are recorded atfair value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materiallyextend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.Interest incurred during the construction phase of capital assets of business-type activities isincluded as part of the capitalized value of the assets constructed. The total interest expenseincurred by the WPCA during the current fiscal year was approximately $1,252,931. Of thisamount, $79,850 was included as part of the cost of capital assets under construction in connectionwith wastewater treatment facilities’ construction projects.

Property, plant and equipment of the City is depreciated using the straight-line method over thefollowing estimated useful lives:

In the governmental fund financial statements, capital assets are reported as expenditures and nodepreciation expense is reported.

Claims and judgments

This liability relates to the City’s self-insurance programs. The obligation consists of claimsincurred and incurred but not reported for medical self insurance, the estimated loss for probablegeneral liability matters and an actuarial estimate for claims incurred and incurred but not reportedfor workers compensation claims. Starting with the fiscal year ended June 30, 2009, the liability ispaid out of the Internal Service Fund.

31Compensated absences

City employees accumulate vacation and sick leave hours for subsequent use or for payment upontermination or retirement. Vacation and sick leave expenses to be paid in future periods are accruedwhen incurred in the government-wide and proprietary fund financial statements. A liability forthese amounts is reported in governmental funds only if they have matured, for example, as a resultof employee resignations and retirements. The liability is typically paid out of the General Fund.

Long-term obligations

In the government-wide financial statements and proprietary fund financial statements, long-termdebt and other long-term obligations are reported as liabilities in the applicable governmentalactivities, business-type activities, or proprietary fund type statement of net assets. Bond premiumsand discounts, as well as issuance costs, are deferred and amortized over the life of the bonds usingthe effective interest method. Bonds payable are reported net of the applicable bond premium ordiscount. Bond issuance costs are reported as deferred charges and amortized over the term of therelated debt.

The governmental fund financial statements recognize bond premiums and discounts, as well asbond issuance costs, during the current period. The face amount of debt issued is reported as otherfinancing sources. Premiums received on debt issuances are reported as other financing sourceswhile discounts on debt issuances are reported as other financing uses. Issuance costs, whether ornot withheld from the actual debt proceeds received, are reported as debt service expenditures.

Pension accounting

Pension Trust Funds:

Employee contributions are recognized in the period in which the contributions are due. Employercontributions to the plan are recognized when due and the City has made a formal commitment toprovide the contributions. Benefits and refunds are recognized when due and payable in accordancewith the terms of each plan.

Governmental Funds:

The net pension obligation (asset), the cumulative difference between annual pension cost and theCity’s contributions to the plans since 1986, is calculated on an actuarial basis consistent with therequirements of Government Accounting Standards Board Statement No. 27. Annual pension costexpenditures are recognized when they are paid or are expected to be paid with current availableresources. The liability is typically paid out of the general fund. The net pension (asset) obligationis recorded as a noncurrent asset/liability in the government-wide financial statements.

Fund equity and net assets

In the Government-Wide Financial Statements, net assets are classified in the following categories:

Invested in Capital Assets, Net of Related Debt - This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduces this category.

32 Restricted Net Assets - This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Assets - This category represents the amount not restricted for any project or other purpose or the deficiency that will need to be provided for from future operations.

In the fund financial statements, fund balances of governmental funds are classified in two separate categories. The two categories, and their general meanings, are as follows:

Reserved fund balance - indicates that portion of fund equity which is not available for appropriation or has been legally segregated for specific purposes. Unreserved fund balance - indicates that portion of fund equity which is available for appropriation and expenditure in future periods or the deficiency that will require funding from future operations.

Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation, is utilized in the governmental funds. Encumbrances outstanding at year-end are reported as a reservation of fund balance as they do not constitute expenditures or liabilities.

2. BUDGETS AND BUDGETARY ACCOUNTING

The City follows the procedures outlined below in establishing its General Fund budget:

♦ The Mayor shall submit to the City Council, no later than 120 days before July 1, the proposed operating and capital budgets. ♦ The Mayor shall submit to the City Council, with the proposed budgets, a certificate that the budget is consistent with a three-year financial plan, and that operating within the budget is feasible. ♦ Expenditures may not legally exceed appropriations at the department level (legal level of control). ♦ Budgets must include appropriations which, among others, allow funding of expenditures required by law, those for debt service, and for elimination of prior deficits, as well as those properly attributable to the fiscal year. ♦ Budgeted revenues cannot exceed certain actual amounts of prior year’s revenues unless justification for each item has been approved by the City Council. ♦ Budgets must include schedules of cash disbursements and cash receipts for the fiscal year on a monthly basis, with sufficient detail for City Council to determine estimated need for cash-flow borrowings during the year. ♦ The City Council shall approve the three year financial plan, with the budget forming the first year of the financial plan, once it determines that such plan is complete. ♦ Transfers and supplemental appropriations of budgeted amounts that change a department’s total budgeted expenditures must be adopted by resolutions of the City Council. There were no supplemental appropriations during the year ended June 30, 2009. In addition, per City Ordinance, all requests for transfers of $10,000 or more in the aggregate in any one fiscal year 33 between sub-line items must also be requested through the City Council with appropriate documentation. Also, any transfers between line item accounts (salary, overtime, fringe benefits and operating and special services) shall be submitted with appropriate documentation, for Council approval regardless of the dollar amount.

In the General Fund and Board of Education Fund, encumbrances are recognized as a valid andproper charge against a budget appropriation in the year in which the purchase order or othercommitment is issued and, accordingly, encumbrances outstanding at year-end are recognized inbudgetary reports as expenditures of the current year. Generally, all unencumbered appropriationslapse at year-end. Encumbered appropriations are carried forward to the next year.

General governmental revenues and expenditures accounted for in the General Fund and Board ofEducation Fund are controlled by formal integrated budgetary accounting systems in accordancewith various legal requirements which govern the City’s operations. The City is required to adopt abudget for its General Fund. The City is not required to prepare budgets for special revenue, capitalproject, proprietary and trust funds. Accordingly, the budget and actual comparisons are onlypresented for the General Fund.

A reconciliation of General Fund and Board of Education Fund operations and fund balancepresented in the statement of revenues, expenditures and changes in fund balance and the amountspresented on the budgetary basis is as follows:

Special Revenue Funds

The City does not have legally adopted annual budgets for its special revenue funds. Budgets for the various special revenue funds which are utilized to account for specific grant programs are established in accordance with the requirements of the grantor agencies. Such budgets are non- lapsing and may comprise more than one fiscal year.

Capital Projects Fund

Legal authorization for expenditures of the capital projects fund is provided by the related bond ordinances. Capital appropriations do not lapse until completion of the applicable projects.

3. CASH, CASH EQUIVALENTS AND INVESTMENTS

The deposit of public funds is controlled by the Connecticut General Statutes (Section 7-402). Deposits may be made in a “qualified public depository” as defined by Statute, or, in amounts not exceeding the Federal Deposit Insurance Corporation insurance limit in an “out of state bank,” as defined by the Statutes, which is not a “qualified public depository.”

The Connecticut General Statutes (Section 7-400) permit municipalities to invest in: 1) obligations of the United States and its agencies; 2) highly rated obligations of any state of the United States or of any political subdivision, authority or agency thereof; and 3) shares or other interests in custodial arrangements or pools maintaining constant net asset values and in highly rated no-load open end money market and mutual funds (with constant or fluctuating net asset values) whose portfolios are limited to obligations of the United States and its agencies, and repurchase agreements fully collateralized by such obligations. Other provisions of the Statutes cover specific municipal funds with particular investment authority. The provisions of the Statutes regarding the investment of municipal pension funds do not specify permitted investments. Therefore, investment of such funds is generally controlled by the laws applicable to fiduciaries and the provisions of the applicable plan.

35The Statutes (Sections 3-24f and 3-27f) also provide for investment in shares of the State Short-Term Investment Fund (STIF) and the State Tax Exempt Proceeds Fund (TEPF). These investmentpools are under the control of the State Treasurer, with oversight provided by the Treasurer’s CashManagement Advisory Board, and are regulated under the State Statutes and subject to annual auditby the Auditors of Public Accounts. Investment yields are accounted for on an amortized-cost basiswith an investment portfolio that is designed to attain a market-average rate of return throughoutbudgetary and economic cycles. Investors accrue interest daily based on actual earnings, lessexpenses and transfers to the designated surplus reserve, and the fair value of the position in thepool is the same as the value of the pool shares.

Deposits

Deposit Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure,the City’s deposits may not be returned to it. The City does not have a deposit policy for custodialcredit risk. The deposit of public funds is controlled by the Connecticut General Statutes. Depositsmay be placed with any qualified public depository that has its main place of business in the Stateof Connecticut. Connecticut General Statutes require that each depository maintain segregatedcollateral (not required to be based on a security agreement between the depository and themunicipality and, therefore, not perfected in accordance with federal law) in an amount equal to adefined percentage of its public deposits based upon the depository’s risk based capital ratio.

Based on the criteria described in GASB Statement No. 40, Deposits and Investment RiskDisclosures, $97,753,231 of the City’s bank balance of $101,259,871 was exposed to custodialcredit risk as follows:

Uninsured and uncollateralized $ 87,636,562

Uninsured and collateral held by the pledging bank’s trust department, not in the City’s name 10,116,669

Total Amount Subject to Custodial Credit Risk $ 97,753,231

Cash Equivalents

Cash equivalents are short-term, highly liquid investments that are both readily convertible toknown amounts of cash and purchased within 90 days of maturity. At June 30, 2009 the City’s cashequivalents amounted to $24,854,090. The following table provides a summary of the City’s cashequivalents (excluding U.S. government guaranteed obligations) as rated by nationally recognizedstatistical rating organizations.

Standard and Poor’s

State Short-Term Investment Fund (STIF) AAAm

State Tax Exempt Proceeds Fund (TEPF)*

*Not rated

36Cash and cash equivalents are restricted for the following uses at June 30, 2009:

Proprietary Fund: Self Insurance Programs $ 2,500,000

Enterprise Fund: Debt Service and Capital Improvements 1,433,775

Total $ 3,933,775

B. Investments

The investment and credit risk policies of the City conform to the policies as set forth by the Stateof Connecticut. The City policy allows investments in the pension funds in the following: 1) equitysecurities, including exchange-traded and over-the-counter common and preferred stocks, warrants,rights, convertible securities, depository receipts and shares, trust certificates, limited partnershipinterests, shares of other investment companies and real estate investment trusts and equityparticipations; 2) securities of certain foreign entities and securities quoted or denominated inforeign currencies; 3) fixed income securities, including bonds, notes, mortgage-related and asset-backed securities, CMOs, convertible securities, Eurodollar and Yankee dollar instruments,preferred stocks and money market instruments subject to approved issuance requirements andcredit and diversification restrictions; 4)* fixed income securities that are within approved creditratings; 5)* unrated securities of the U.S. Treasury and U.S. Government Agencies are permitted;6)* money market funds and money market instruments of an investment grade commonly held inmoney market funds such as repurchase agreements, banker’s acceptances, and commercial paper;7)* SEC registered mutual funds and bank and insurance company commingled funds that invest instocks and bonds; 8)* closed end SEC registered mutual funds that invest within the overall policyof allowable investments; 9) real estate properties determined to be appropriate for investment,including appropriate limited partnerships and real estate investment trusts; 10) futures contractsonly when used by the Fund as a hedge against portfolio loss, or if used by an equity index fund asa temporary substitute for investment in equity securities, or if used by a debt index fund as atemporary substitute for investment in debt securities; and 11) notwithstanding other limitationsincluded herein, assets may be invested in certain hedge fund investments subject to the guidelinesset forth in the Supplemental Investment Policy Statement for Hedge Fund Investments that may beadopted by the Trustees. The Statutes (Sections 3-24f and 3-27f) also provide for investment inshares of the Connecticut Short Term Investment Fund and the Tax Exempt Proceeds Fund.

* Investments in the General Fund are restricted to the investment types marked by an asterisk

The City and the pension funds do not have a custodial credit risk policy for investments.

The pension fund asset allocation parameters are as follows:

37Interest Rate Risk: The City and pension funds have policies to limit their exposure to fair valuelosses arising from changes in interest rates by structuring the investment portfolio so that securitiesmature to meet cash requirements for ongoing operations, thereby avoiding the need to sellsecurities on the open market prior to maturity, and investing operating funds primarily in shorter-term securities, money market mutual funds or similar investment pools.

Concentrations: The City’s policy is to maintain a diversified portfolio to minimize the risk of lossresulting from over concentration of assets in a specific issuer.

Custodial Credit Risk: This is the risk that in the event of the failure of the counterparty (e.g.,broker-dealer) to a transaction, a government will not be able to recover the value of its investmentor collateral securities that are in the possession of another party.

Total Cash and Investments $ 385,313,490

38Interest Rate Risk: This is the risk that changes in market interest rates will adversely affect the fairvalue of an investment. Generally, the longer the maturity of an investment, the greater thesensitivity of its fair value to changes in market interest rates. Information about the exposure ofthe City’s debt type investments to this risk using the segmented time distribution model is asfollows:

Total $ 76,893,032 $ 2,681,335 $ 42,534,998 $ 18,056,438 $ 13,620,261

Credit Risk: Generally, credit risk is the risk that an issuer of a debt type investment will not fulfillits obligation to the holder of the investment. This is measured by assignment of a rating by anationally recognized rating organization. U.S. government securities or obligations explicitlyguaranteed by the U.S. government are not considered to have credit risk exposure. Presentedbelow is the minimum rating as required for each debt type investment.

Capital projects funds:

Pension trust funds:

Public Safety Plan A - 52,800

Internal service fund:

City health insurance 756,866 704,708

Nonmajor governmental fund elimination (392,635) (392,635)

Total $ 23,047,261 $ 23,047,261

41 The balances, as stated above, are the result of the time lag between the dates payments occur between funds for various activities. Such balances are expected to be paid or collected within one year.

Interfund transfers during the year ended June 30, 2009 were as follows:

$ 2,000,000 $ 222,867,074 $ 224,867,074

Transfers are used to account for unrestricted revenues collected mainly in the General Fund to finance various programs accounted for in other funds in accordance with budget authorizations. The Board of Education fund transfer represents unrestricted revenues collected by the General Fund to finance unreimbursed education expenditures.

6. BULK LIEN SALES

During the year ended June 30, 2009, the City executed a bulk sale of property tax liens and collected proceeds of approximately $8,726,600. The City retains no interest in the assigned liens. The purchaser bears all risks relating to its ability to collect the amounts owed and should it acquire title to the underlying real estate through foreclosure or otherwise, will bear all risks associated with the ownership and sale of the real property.

427. CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2009 was as follows:

43 Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Activities: General government $ 3,045,280 Protection of person and property 1,849,014 Conservation of health 18,263 Public facilities, including depreciation of general infrastructure assets 4,408,400 Education 7,987,667 Parks and recreation 573,084

Total Depreciation Expense - Governmental Activities $ 17,881,708

Business-Type Activities: WPCA $ 6,208,486

8. UNEARNED REVENUE/DEFERRED REVENUE

Governmental funds and governmental activities report unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unearned revenue and deferred revenue reported in the governmental funds and governmental activities were as follows:

Prior Year’s In-Substance Defeasance

In prior years, the City defeased various bond issues. As of June 30, 2009, the amount of defeaseddebt outstanding but removed from the governmental activities column of the statement of netassets amounted to $141,140,000.

The annual debt service requirements relative to the outstanding notes payable and generalobligation bonds are as follows: Governmental Activities Business-Type ActivitiesYear Ending June 30, Principal Interest Total Principal Interest Total

The total overall statutory debt limit for the City is equal to seven times annual receipts from taxation, or $1,741,261,410. All long-term debt obligations are retired through General Fund appropriations or user charges.

Indebtedness above includes bonds authorized, but not issued as follows:

General purpose $ 72,352,000

Unfunded Pension Benefit Obligation 90,000,000 Schools 67,698,000

$ 230,050,000

Tax Anticipation Notes Payable

On June 8, 2009, the City issued a tax anticipation note in the amount of $23,500,000 to fund cash flows for operating expenses. The notes matured and were paid in full on August 7, 2009 with an interest rate of 3.69%.

On October 22, 2009, the City issued a tax anticipation note in the amount of $71,500,000 to fund cash flows for operating expenses. The notes mature on February 5, 2010 with an interest rate of 2.50%.

10. COMMITMENTS AND CONTINGENCIES

The City, its officers and its employees are defendants in a number of lawsuits. The ultimate disposition and fiscal consequences of these lawsuits are not presently determinable. The City Attorney’s Office has reviewed the status of the pending litigation and reports that it is the opinion of the City Attorney that such pending litigation will not be finally determined so as to result individually or in the aggregate in a final judgment against the City, or settlement which would materially adversely affect its financial position, except that adverse judgment in cases described below could have a fiscal impact in the aggregate and in certain circumstances which might be significant.

47Personal Injury and Other Actions

There are presently certain major personal injury and other claims and lawsuits that the City isactively defending for which, in the event the City is held liable, the amount of recovery couldunder certain circumstances total between $5 and $10 million dollars in the aggregate. Anyrecovery under such actions will be paid by the City, which is self-insured for such risks.

Steel Point Peninsula Suit - Conroy Development Co.

In the summer of 2001, the City and several elected and appointed officials were named in a suitfiled in U.S. District Court by the former preferred developer of the Steel Pointe Project, ConroyDevelopment Co. (Conroy), seeking damages of approximately $105 million. Conroy’s action isbased upon the City’s decision to terminate its memorandum of understanding with the developer,as well as claims linked to the 2001 federal investigation of City officials and business entities.Defendants filed a motion to dismiss which was granted by the court on or about September 23,2003. Conroy did not file an amended complaint within the time permitted by the Federal court todo so.

On or about January 14, 2004, Conroy filed a related complaint against the City and various otherparties, including the former Bridgeport Mayor, in Connecticut State court. The City and variousco-defendants filed motions to dismiss, which were granted in part and denied in part. Trial hasconcluded with jury verdicts for the defendant City as to all counts. Conroy appealed the judgmententered in favor of the City, as well as those judgments entered for and against the co-defendants,and the trial court’s rulings banning Conroy’s anti-trust claims. In October 2009, Conroy withdrewits appeal of the judgment in favor of the City. The anti-trust appeal to which the City is a partydefendant is still pending, and based upon court scheduling orders and calendars is likely to remainso.

Wheelabrator Bridgeport L.P. (Wheelabrator), as owner of a solid waste to energy facility andcurrently the City’s largest taxpayer, has filed tax valuation appeals for the 2007, 2008 and 2009Tax Grand Lists. These appeals are presently pending in Bridgeport Superior Court. It isanticipated that, until the valuation of the Wheelabrator real and personal property is judiciallydetermined, Wheelabrator will continue to add subsequent tax years to its pending court action.

The City has assessed the property at the following assessed values (70% of FMV): for 2007 - $256million for real property, and $12 million for personal property; for 2008 - $281 million for realproperty, and $7.5 million for personal property; and for 2009 - yet to be determined, Theseassessed valuations formed the basis for tax bills as follows: 2007 - $5,704,847 for real property,and $538,415 for personal property; 2008 - $10,891,256 for real property, and $286,353 forpersonal property; and 2009 - yet to be determined. In prior years, Wheelabrator paid a fixedescalating contractual payment in lieu of taxes, most recently in an amount of approximately $3million per annum.

To date, Wheelabrator has been paying the statutorily mandated 90% of tax bills as required bystate law to avoid arrears collection activity. It is likely that Wheelabrator will continue suchpayments during the pendency of the tax appeal. In the pending court case, Wheelabrator hasneither made a demand for a specified dollar amount of reduction in valuation/tax billings, nor hasit supplied any documentation to justify such a reduction. Therefore, it is premature to determinewhat, if any, reduction is ascertainable and warranted. If Wheelabrator is successful in its appeals, 48the City would be required to refund to Wheelabrator any amount above the court ordered reductionin taxes previously paid to the City by Wheelabrator.

Beardsley Zoo

On May 13, 1997, the City sold the land, buildings, equipment and animals comprising theBeardsley Zoological Gardens (the Zoo) to the Connecticut Zoological Society (the Society).Under the sale agreement, if the Society is no longer willing or able to operate and maintain theZoo, the responsibilities associated with it, and the trust assets, will revert back to the City.

The City also entered into a service agreement with the Society in which the City is required toprovide operating assistance to the Society for such costs as personnel, supplies, services, materials,utilities, maintenance, equipment and vehicles, that it currently provides to the Zoo, whichapproximated $1,163,000 during the year ended June 30, 2009, before the subsidy referred tobelow. These levels can be adjusted up or down depending on changes to the Zoo such asexpansion. However, the Society is required to pay the City any subsidy received from the State.A subsidy of $405,000 was received for the year ended June 30, 2009. The Society retains anyrevenues from admissions, vending, concessions, other grants or bequests.

WPCA Privatization Agreement

On April 11, 2003, the WPCA entered into a ten-year agreement with an independent contractor(the Contractor) to provide operations, maintenance and management services to its two wastewatertreatment facilities and systems.

The WPCA may terminate the agreement in its sole discretion, for its convenience and withoutcause at any time commencing on the third year anniversary of the commencement date upon onehundred twenty days prior written notice to the Contractor. If the WPCA exercises its conveniencetermination, the WPCA shall not be liable to the Contractor for any demobilization costs,termination fees or any other costs or expenses except for the portion of the service fee due to theContractor pursuant to the terms of the agreement through the date of termination, the unamortizedcapital costs and certain other costs.

Consent Decrees

Under various consent decrees issued by the State of Connecticut Department of EnvironmentalProtection (consent decrees), the WPCA is required to bring both of its treatment facilities incompliance with federal standards and eliminate certain combined storm and sanitary sewers. Theestimated cost of these improvements is $198,000,000. As of June 30, 2009, approximately$158,000,000 relating to these projects, including capitalized interest, have been incurred andincluded in property and equipment. Based on current engineering estimates, completion of theseprojects will be within the next six years. Funding for these improvements is being provided by theState of Connecticut’s Clean Water Fund in the form of loans and grants. As of June 30, 2009, theState is committed to providing the WPCA additional funding in the form of loans and grants ofapproximately $4,400,000 and $1,000,000, respectively.

49Municipal Solid Waste Service Agreement

The City executed a Municipal Service Agreement dated as of August 30, 1985 (the 1985 MSA)with the Connecticut Resources Recovery Authority (the Authority) for the disposal of solid wastethrough the Greater Bridgeport Resource Recovery System (the System), including a solid wastedisposal and processing facility (the Facility) located in Bridgeport and operated by BridgeportResco Company, L.P. (the Company). The Facility began commercial operation in July 1988 and isdesigned to process up to 2,250 tons of solid waste per day. The 1985 MSA expired at the end ofDecember 2008.

Bridgeport is one of twelve municipalities that has entered into a 2009 Successor Municipal ServiceAgreement (the 2009 MSA) with the Authority for the disposal of solid waste through the System.Each municipality which has signed such 2009 MSA (a Participating Municipality) has agreed todeliver or cause to be delivered to the System all Acceptable Waste, as defined in the 2009 MSA,generated within its boundaries.

For fiscal year ending June 30, 2010, the Authority will bill each Participating Municipality a fixedcharge of $63 per ton of Acceptable Waste actually delivered by or on behalf of each ParticipatingMunicipality. Each Participating Municipality has agreed to pay Municipal Disposal Fees to theAuthority for the acceptance and processing and/or disposing of Acceptable Waste. The MunicipalDisposal Fees, which are payable on a monthly basis, include (i) disposal fees of the Authority tothe Company under a Solid Waste Disposal Agreement, and (ii) an Authority Administrative Fee.

The obligation of the Participating Municipalities to pay Municipal Disposal Fees, so long as theAuthority meets its obligation to accept and dispose of Acceptable Waste, is absolute andunconditional and shall not be subject to any abatement, reduction, set-off, counterclaim,recoupment, defense (other than payment itself) or other right which the Participating Municipalitymay have against the Authority or any other person for any reason whatsoever. If any ParticipatingMunicipality shall default in the payment of any amounts for which it is responsible and suchdefault continues for more than 60 days, the other Participating Municipalities shall pay their shareof the amounts unpaid by the non-paying Participating Municipality and shall be entitled to fullreimbursement upon the Authority collecting such delinquent amounts.

The 2009 MSA contains Minimum Tonnage Guarantees for each Participating Municipality. TheCity of Bridgeport’s Minimum Tonnage Guarantee is 60,808 tons, which it directly delivers to theFacility. The aggregate Minimum Tonnage Guarantee by all the Participating Municipalities is265,000 tons.

Bridgeport is also part of an Inter-Community Agreement dated September 15, 1989 establishing aregional recycling program. The Southwest Connecticut Regional Recycling Operating Committee(SWEROC) was established to implement a regional recycling program to meet the State ofConnecticut mandated program for recycling, per Sections 22a-241 through 22a-241i of theConnecticut General Statutes. Bridgeport is one of seventeen “Contracting Communities”participating in the SWEROC recycling program. The City is committed to supply recyclablesannually consisting of: food and beverage containers made of glass, metal and certain plastics, andnewspapers. Other defined residential recyclables are cardboard, waste oil, storage batteries andscrap metal.

5011. PENSION PLANS

Connecticut Municipal Employees’ Retirement Fund

All full-time employees of the City, except for Board of Education personnel, police, firefighters, janitors and engineers who participate in other plans described below, participate in the Connecticut Municipal Employees’ Retirement Fund B (CMERF), a cost-sharing multiple employer public employee retirement system administered by the State of Connecticut.

Employees are eligible to participate in CMERF provided they work at least 20 hours per week if hired after September 30, 1969. If hired prior to that date there is no minimum hourly requirement. All benefits vest after 5 years of continuous service. Members who retire after age 55 with 15 years of service or after 25 years of service, irrespective of age, are entitled to an annual retirement benefit, payable monthly for life, in an amount for each year of service equal to:

♦ If not covered by Social Security: 2% of the average of earnings for the three highest paid years of service. ♦ If covered by Social Security: 1-1/6% of the average of earnings not in excess of the taxable wage base for the 10 highest paid years, plus 2% of the average of earnings for the three highest paid years of service which is in excess of the average of earnings not in excess of the taxable wage base for the 10 highest paid years.

CMERF also provides death and disability benefits.

Benefits and other plan provisions are established by State statute. Covered employees are required by Connecticut statute to contribute 2-1/4% of earnings upon which social security tax is paid plus 5% of earnings upon which no social security tax is paid. The City is required to make contributions as set by the State Retirement Commission to fund the remaining cost. The employer contribution represents 7.00% of covered payroll. The City’s contributions for the years ended June 30, 2009, 2008, and 2007 were $ 5,187,641, $5,410,000 and $5,312,000, respectively, equal to the required contributions for each year.

The financial statements of the plan are available from the State Treasurer for the CMERF Fund, 55 Elm Street, Hartford, CT 06106.

State Teachers’ Retirement System

The faculty and professional personnel of the Board of Education participate in a contributory defined benefit plan, established under Section 10.183 of the Connecticut General Statutes, which is administered by the Connecticut State Teachers’ Retirement Board. A teacher is eligible to receive normal retirement benefits if he or she has attained age sixty and has accumulated twenty years of credited service in the public schools of Connecticut or has attained any age and has accumulated thirty-five years of credited service, at least twenty-five of which are service in the public schools of Connecticut. The financial statements of the Plan are available from the Connecticut Office of the State Comptroller, 55 Elm Street, Hartford, CT 06106.

Certain part-time and full-time certified teachers are eligible to participate in the plan and are required to contribute 7.25% of their annual earnings to the plan. The City does not and is not legally responsible to contribute to the plan. The State of Connecticut contributes based on actuarially determined amounts. The funding level was determined based on an actuarial valuation 51of the plan as a whole, which does not provide actuarial information on an individual municipalitybasis.

In addition, the City has recognized revenues and expenditures for on-behalf payments for pensioncontributions paid directly to the Connecticut State Teachers’ Retirement System by the State ofConnecticut. Such on-behalf payments were approximately $17,420,898 for the year endedJune 30, 2009. This was a significant decrease from the prior year. In fiscal year ended June 30,2008, the State of Connecticut issued pension obligation bonds to partially fund the plan. In thecurrent year the State is funding at normal levels.

Single Employer Defined Benefit Plans

The City maintains and administers four single employer defined benefit pension plans which coversubstantially all of the employees of the City with the exception of those covered under CMERFand the State Teachers’ Retirement System. The costs of administering the plans are paid by eachindividual plan. Stand alone plan reports are not available for these plans. The four City plans areas follows:

i) Public Safety Plan A Investment and Pension Trust (Plan A)

The Police Retirement Plan B and Firefighters’ Retirement Plan B are funded on an actuarial basis;the Janitors’ and Engineers’ Retirement Plan is funded on a “pay as you go” basis, that is, the City’scontribution to the plan is the amount necessary to pay annual benefits. The City makescontributions to Plan A equal to the actuarially determined Normal Cost amounts. The net pensionobligation and the contribution requirements are actuarially determined. Plan A is a closed plan andas such no new enrollments have been allowed since January 1, 1984.

In August 1985, the City purchased an annuity contract for approximately $75 million to fund aportion of the net pension obligation for Plan A. The plan assets available for benefits and the netpension obligation amounts for Plan A excludes the plan assets and pension obligations covered bythe above mentioned annuity contract. For the year ended June 30, 2009, approximately$3,074,663 of benefits were provided through this annuity contract.

In August 2000, the City issued $350,000,000 of taxable general obligation pension funding bonds.The proceeds of these bonds were transferred into Plans A’s Investment Trust (the “A Trust”). Theproceeds and any future investment earnings are to be used to make contributions to the Plan A orto pay benefits on behalf of the Plan. The City can, however, withdraw from the Plan A Trust thegreater of: 1) 20% of the amount by which the Plan A Trust assets exceed the present value ofaccrued Plan benefits ($355,017,090 based on the July 1, 2008 actuarial valuation) or 2) the amountof the Plan A Trust assets in excess of 110% of the present value of accrued Plan benefits.

Under State statutes regarding pension obligation bonds, the City is required to make its“Actuarially Recommended Contribution,” defined as the lesser of the Employer’s Normal Cost orthe Annual Required Contribution as defined by GASB Statement No. 25. In addition, the Citycould have to make additional contributions as it is required to fund Plan A at approximately thesame funding level as immediately following the bond issuance (79%).

Number of retirees receiving benefits 926 83 41 48

Benefit provisions 50% of compen- 2% of annual 2% of annual 2% of 3 year

sation plus 2- salary for each salary for each average 1/2% for each full year of year of service compensation year of service service plus plus 50% of for each year of in excess of 20 50% of subsequent service, up to 33 years, maximum subsequent compensation years plus 1% 75% compensation increase, of 3 year increase, maximum 70% compensation maximum 70% thereafter

Definition of “Compensation” Maximum yearly Maximum yearly Maximum yearly Average of three compensation compensation compensation highest years currently being currently being currently being paid to members paid to paid to in the members in the members in the department in department in department in the same the same the same position that the position which position which employee held the employee the employee at the time of held at the time held at the time retirement of retirement of retirement

Eligibility requirements Vest after 10 Vest after 5 years Vest after 5 years Vest after the years of service of service of service earlier of 10 years of continuous or 15 years of aggregate service

Obligation to contribute in accordance with funding policy: Employee 8% of earnings 6% of earnings 6% of earnings 5% of earnings

Net Assets Held in Trust for Pension

The City, in accordance with various collective bargaining agreements, provides retiree medical benefits for the lifetime of the retired member and covered dependents. The plan covers City, Board of Education, Police and Fire employees as further defined in collective bargaining agreements and other written materials. Eligibility and premium sharing information is detailed in the various collective bargaining agreements. The City does not issue separate stand alone financial statements for the plan.

At July 1, 2008 plan membership consisted of the following:

Number of members: Active 4,195 Retired members 3,020

Total Participants 7,215

B. Funding Policy

The City currently pays for postemployment health care benefits on a pay-as-you-go basis. As of June 30, 2009 the City has not established a trust fund to irrevocably segregate assets to fund the liability associated with the post employment benefits, which would require the reporting of a trust fund in accordance with GASB guidelines. The contribution requirements of plan members and the Town are also negotiated with the various unions representing the employees. Retired plan members and beneficiaries currently receiving benefits are required to contribute specified amounts monthly towards the cost of health insurance premiums as follows:

Eligibility:

• City employees can retire on or after reaching the earlier of 25 years of service or age 55 and completing 15 years of service. • Board of Education (non-teachers) employees can retire the earlier of 25 years of service or age 55 and 15 years of service. • Board of Education (teachers) employees can retire the earlier of 35 years of service or age 60 and 25 years of service. • If an employee is a police or fire employee, attainment of age 45 and 25 years.

61Medical Benefit:

• Medical coverage continues for the lifetime of the retiree.

• Substitute Teachers, Part-time employees and Crossing Guards are not eligible for coverage. • The eligible retirees pay a percentage of the cost of coverage calculated at the time of retirement. The percentage, based on group, is shown below.

BCAS 30% Yes

Police 12% Partial

*Assumed from current negotiations, currently Social Workers are at 2.5% and Firefighters pay $78/month.

• Spousal coverage is available for life of the retiree, based on the percentages above.

62Annual OPEB Cost and Net OPEB Obligations

The City of Bridgeport’s annual other post employment benefit (OPEB) cost is calculated based onthe annual required contribution (ARC), an amount actuarially determined in accordance with theparameters of GASB Statement 45. The ARC represents a level of funding that, if paid on anongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarialliabilities (or funding excess) over a period not to exceed thirty years. The following table showsthe components of the City’s annual OPEB cost for the year, the amount actually contributed to theplan, and changes in the City’s net OPEB obligation (asset):

Annual required contribution (ARC) $ 50,744,800

Annual OPEB cost (expense) 51,096,000

Contributions made 30,099,100

Increase in net OPEB obligation 20,996,900

Net OPEB obligation, beginning of year 17,709,000

Net OPEB Obligation, End of Year $ 38,705,900

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and thenet OPEB obligation (asset) for the fiscal years ending June 30, 2008 and 2009 is presented below.Data is only presented for two fiscal years, due to the year ending June 30, 2009 being the secondyear of implementation.

6/30/2008 $ 47,314,000 $ 29,605,000 62.6% $ 17,709,000

6/30/2009 51,096,000 30,099,100 58.9 38,705,900

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts andassumptions about the probability of occurrence of events far into the future. Examples includeassumptions about the future employment, mortality and the healthcare cost trend. Amountsdetermined regarding the funded status of the plan and the annual required contributions of theemployer are subject to continual revision as accrual results are compared with past expectationsand new estimates are made about the future. The following schedule of funding progress presentsmulti-year trend information about whether the actuarial value of plan assets is increasing ordecreasing over time relative to the actuarial accrued liabilities for benefits.

7/1/2007 $ - $ 874,661,900 $ 874,661,900 0.0% $ 239,783,000 364.8%

7/1/2008 - 861,812,200 861,812,200 0.0 221,789,000 388.6

Schedule of Employer Contributions

Annual Required Percentage

Year Ended Contribution Contributed

2008 $ 47,314,000 65.5%

2009 50,744,800 59.3

Projections for benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit cost between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the July 1, 2008 actuarial valuation, the entry age normal cost method was used. The annual required contribution (ARC) effects a 30-year, level amortization of the unfunded actuarial accrued liability (AAL). The actuarial assumptions include a 5.5% investment rate. The medical assumption begins at 11.5% and decreases to a 5.0% long-term trend rate for all healthcare benefits after thirteen years. The dental assumption begins at 6% and decreases to 5.0% per year after two years.

13. LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS

A portion of the Bridgeport Seaside Landfill was used for disposal of materials classified as hazardous waste from 1974 until late 1981 when it stopped accepting waste. The hazardous waste area of the landfill is subject to federal and state laws and regulations which required that the City close the facility in a manner that minimizes the need for further maintenance; and controls, minimizes or eliminates, to the extent necessary to protect human health and the environment, post- closure escape of hazardous waste, hazardous constituents, leachate, contaminated run-off, or hazardous waste decomposition products to the ground or surface waters or to the atmosphere. In addition, the City is required to perform certain maintenance and monitoring functions at the hazardous waste site for thirty years after closure. The estimated total current cost of the postclosure care of $203,782 is based on the estimated amount to be paid for all equipment, facilities and services required to close, monitor and maintain the site as of June 30, 2009. The actual cost of postclosure care costs may be higher due to inflation, changes in technology or changes in federal, state or local laws and regulations.

The nonhazardous waste portion of the landfill is not subject to any federal, state or local laws and regulations requiring closure or postclosure care. 6414. RISK MANAGEMENT

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City carries commercial insurance for insurable risks of loss except for general liability, workers’ compensation and employee health and dental insurance. Coverage has not been materially reduced, nor have settled claims exceeded commercial coverage in any of the past three years.

Workers’ Compensation

The City carries no insurance coverage for losses arising out of workers’ compensation claims. These claims are paid from the Internal Service Fund. The City estimates a liability for workers’ compensation claims payable and for claims incurred but not reported based on an actuarial valuation. This is accounted for in the Internal Service Fund.

Group Health Insurance

The City maintains a group health and dental self-insurance plan to pay for medical claims of current and retired City employees and their covered dependents. Approximately 4,200 active employees and 3,600 retirees receive their health coverage through this plan. Payments related to these claims are made by outside administrators under administrative services contracts and are accounted for in the Internal Service Fund. The contract requires the City to maintain a $2,500,000 certificate of deposit which is recorded as restricted cash in the accompanying balance sheet.

Reconciliation of Liabilities

The liability for general liability, workers’ compensation and group health insurance includes all known claims reported plus a provision for those claims incurred but not reported, net of estimated recoveries. The liability is based on past experience adjusted for current trends and includes incremental claim expenditures. The liability for workers’ compensation claims is calculated using actuarial methods. Changes in the reported liability are as follows:

A reconciliation of changes in the aggregate liabilities for claims for the current year and the prior fiscal year is as follows:

Current Year Beginning of Claims and Fiscal Year Changes in Claim End of Fiscal Liability Estimates Payments Year Liability

2008 $ 65,740,860 $ 88,167,399 $ 86,607,259 $ 67,301,000

2009 67,301,000 102,263,079 90,691,701 72,277,783

The current portion of claims incurred but not reported as of June 30, 2009 is $18,835,783, which relates to Group Health Insurance Claims of $6,177,783 and $12,658,000 of general liability and workmen’s compensation claims and is reported in the Internal Service Fund. The remaining liability for general liability and workmen’s compensation claims of $53,442,000 is recorded as long-term obligations.

6515. FUND DEFICITS

The following funds have fund deficits as of June 30, 2009:

Nonmajor Governmental Funds:

Special Revenue: Community Development $ 197,952 Social Services 239,624 Community Development Block Grant 504,498 HOME Program 224,098 Development Administration State Grant 1,109,023

Capital Projects: 1997 Bond Issue 18,820

Proprietary: Internal service 68,444,020

The City anticipates eliminating the fund deficits through future grants and revenues.

66Supplementary InformationGeneral Fund GENERAL FUND

The General Fund is used to account for resources traditionally associated with government

which are not required legally or by sound financial management to be accounted for in another

fund. EXHIBIT A CITY OF BRIDGEPORT, CONNECTICUT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND

BALANCE - BUDGETARY BASIS - BUDGET AND ACTUAL - GENERAL FUND

FOR THE YEAR ENDED JUNE 30, 2009

Variance With Budgeted Amounts Final Budget Original Final Actual Positive (Negative)

Unreserved fund balance, July 1, 2008 10,605,102

Unreserved Fund Balance, June 30, 2009 $ 10,752,753

Special revenue funds are used to account for specific revenues that are legally restricted toexpenditures for particular purposes.

Education Grants Fund - is used to account for U.S. Department of Education grants, as well aslocal grants relating to education.

Health and Sanitation Fund - is used to account for U.S. Department of Health and HumanServices, U.S. Department of Agriculture and Connecticut Department of Health Services grants,as well as local grants relating to health services.

Community Development Fund - is used to account for state and local grants used for suchprograms as labor-management cooperation, harbor management planning and economicdevelopment.

Other Programs Fund - is used to account for Connecticut Office of Policy and Managementgrants for such programs as Drug Enforcement and Local Capital Improvement (LOCIP), as wellas other miscellaneous federal and state grants.

Social Services Fund - is used to account for U.S. Department of Labor, U.S. Department ofHealth and Human Services and Connecticut Office of Policy and Management grants for suchprograms as employment for senior citizens, summer feeding for school-age children and homecare maintenance for the handicapped.

Community Development Block Grant Fund - is used to account for U.S. Department ofHousing and Urban Development (HUD) and Connecticut Department of Housing grants usedfor such activities as housing programs, community facilities, economic development and publicservices.

Housing Opportunities AIDS - is used to account for the U.S. Department of Housing andUrban Development (HUD) grant used for such activities as devising long-term strategies formeeting the housing needs of persons with acquired immunodeficiency syndrome (AIDS).

HOME Program Fund - is used to account for HUD grants used to expand the supply ofaffordable housing including home ownership opportunities, rental housing and tenant basedrental assistance.

Development Administration State Grant Fund - is used to account for Connecticut Departmentof Social Services and Connecticut Department of Economic Development grants used for suchprograms as community centers, low and middle income housing, and neighborhoodrehabilitation.

Library Fund - is used to account for donations and income from the investments of donationsand endowments restricted for library-related activities.Education Fund - is used to account for donations and income from the investment of donationsrestricted for scholarship grants to qualified recipients.

Parks and Recreation Fund - is used to account for donations and income from donations andendowments restricted for activities mainly related to parks and recreation.

Capital Projects Funds

Capital projects funds are used to account for the acquisition and construction of major capitalfacilities other than those financed by proprietary funds and trust funds.

Education and Library Fund - is used to account for certain education and library capitalprojects funded through state grants.Health and Sanitation Fund - is used to account for the construction of the Bridgeport-Trumbull Intercept Sewer Project.

Highway and Parking Fund - is used to account for the undertaking of special street pavingprojects.

General Government Fund - is used to account for small construction projects funded out oflocal grants.

Parks and Recreation Fund - is used to account for acquisition and construction of recreationalfacilities located at the various city parks.

Municipal Airport Fund - is used to account for federal, state and local grants used forconstruction, renovation and other improvements at Sikorsky Airport.

Capital Reduction Fund - is used to account for the miscellaneous construction and renovationprojects approved by the City Council not accounted for in other capital project funds.

Bond Issue Fund - is used to account for various school construction and capital equipmentacquisition projects that are funded out of bond proceeds.

School Bond Issue Fund - is used to account for various school construction that is funded outof proceeds from the 1995 bond issue.

1997 Bond Issue Fund - is used to account for various construction projects that are funded outof proceeds from the 1997 bond issue.

Permanent Funds

Permanent Funds are used to report resources that are legally restricted to the extent that onlyearnings, not principal, may be used for purposes that support the City’s programs.

Library Fund - is used to account for endowments and donations, the income from which isrestricted for library-related activities.

Education Fund - is used to account for endowments and donations, the income from which isrestricted for scholarship grants to qualified recipients. CITY OF BRIDGEPORT, CONNECTICUT EXHIBIT B-1

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS

JUNE 30, 2009

Special Revenue Funds

Health Community Housing Education and Community Other Social Development Opportunities HOME Grants Sanitation Development Programs Services Block Grant AIDS Program ASSETS

This part of the City of Bridgeport, Connecticut’s comprehensive annual financial report presentsdetailed information as a context for understanding what the information in the financialstatements, note disclosures, and required supplementary information says about the government’soverall financial health.

Financial Trends

These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time.

Revenue Capacity

These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax.

Debt Capacity

These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future.

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place.

Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs.

The accompanying tables are presented in the above order. Refer to the Table of Contents forapplicable page numbers. TABLE 1 CITY OF BRIDGEPORT, CONNECTICUT

TOTAL $ 822,770,714 12.23% $ 259,468,854 10.22%

** Note: Name change occurred during period.

Source: City of Bridgeport - Assessor’s Office

96 CITY OF BRIDGEPORT, CONNECTICUT TABLE 9

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS

(Unaudited)

Collected Within the

Fiscal Year of the Levy Total Collections to Date Taxes Levied Collections in Fiscal Year Ended Grand List for the Percentage Subsequent Percentage June 30: Year Tax Year Amount of Levy Years Amount of Levy

Source: City of Bridgeport - Tax Collector’s Office

TABLE 10 CITY OF BRIDGEPORT, CONNECTICUT

RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING BY TYPE

LAST TEN FISCAL YEARS

(In Thousands)

(Unaudited)

Governmental Business-Type Activities Activities General Less Amount Net Percentage of Debt General Total Percentage of Fiscal Obligation Available in General Actual Property Per Loan Obligation Revenue Primary Per Capita Per Year Bonds Debt Services Bonded Debt Value Capita Payable Bonds Bonds Government Income Capita

* Note: Includes $350,000,000 Taxable Pension Bond Issue of August 28,2000, Series B TABLE 11 CITY OF BRIDGEPORT, CONNECTICUT

DIRECT GOVERNMENTAL ACTIVITIES DEBT

FOR THE YEAR ENDED JUNE 30, 2009

(Unaudited)

Debt Governmental Unit Outstanding

General obligation debt $ 654,200,000

Less school construction grants receivable -

principal portion only (13,046,930)

Total Direct Debt $ 641,153,070

Source: City records.

Note 1: The City is not subject to the debt of overlapping governments.

Note 2: School construction grants are receivable in substantially equal installments over the life of outstanding school bonds, obtained from the Office of Policy and Management, State of Connecticut.